If you ask employees to leave that day, however, then you set the final date of termination. Technically speaking, you become the ‘‘moving party,’’ and you’ll have changed their resignation to a termination. What does that mean? First, from an unemployment insurance standpoint, the employee may be eligible for unemployment. If the company is the moving party, states will typically award a claim of unemployment insurance to a petitioner employee.

Second, there is a possibility that an employee who leaves under adverse circumstances may pursue legal action against you in the form of a wrongful termination lawsuit. Remember that in wrongful termination challenges, the burden may be on you to prove that you had cause to terminate. Since you were the moving party but the employee may have had no performance problems during his tenure, you wouldn’t necessarily be able to demonstrate that you had cause to terminate. And lo and behold—you’d have to settle out of court because you’d have no defense.

There’s a combination solution to avoid this unemployment claim and wrongful termination liability exposure: First, ensure that you have a clearly defined employment-at-will working relationship by documenting the at-will policy on employment applications, in company handbooks, in offer letters, and in free-standing employment- at-will confirmation statements. Second, simply pay employees for their two weeks’ notice if you require them to leave the same day that they give notice. In essence, that two-week payout serves as a simple insurance policy. The employee is paid through the end of the notice period, that individual remains the ‘‘moving party,’’ and claims for unemployment insurance or wrongful termination liability should be minimized.Make this a standard employment practice whenever you relieve people of their duties before their resignation date.

Taken From : The Hiring and Firing Quention and Answer Book